ACCA · Question 15 · Financial Management Function
'BlockLogistics', a publicly listed supply chain firm, is experiencing an 'agency problem' where directors are prioritizing short-term bonuses over long-term shareholder wealth.
Which TWO of the following mechanisms are designed to reduce the agency problem?
Answer options:
Linking executive remuneration to long-term share price performance.
Increasing the fixed base salary of directors regardless of performance.
Implementing strong corporate governance codes and independent non-executive directors.
Allowing the CEO to also hold the position of Chairman of the Board.
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